Thom Tillis Bill Is Haunting the Industry: Litigation Finance

Happy Friday! Even though I took a week off, the news sure hasn’t.

🦇 In honor of Halloween, I bring you one of the industry’s scariest figures: Senator Thom Tillis. Tillis spoke exclusively to Bloomberg Government this week about plans to revive legislation that would levy a 41% tax on the industry’s profits.

To recap: his legislation was initially included in the “big, beautiful” bill in June, prompting litigation funders to freak out and spurring a big ramp up in lobbying around the topic. It was eventually removed from the package.

Tillis, who has announced he won’t run for re-election, told my colleagues that he hasn’t given up on his bill, saying it was “silly” that investors in lawsuits have better tax treatment than the victims who receive an award.

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Now We Got Bad Blood🧛

“His practice was more akin to a Ponzi scheme than a legitimate litigation finance program.” That’s what Rick Solit, who poured nearly $5.3 million into financing mass tort cases and tax credit claims, said about Ed Lake in his lawsuit against Lake Law.

Solit is suing for more than $6 million damages (plus any profits or tax credits owed). He claims the firm delivered on only a fraction of the cases it promised. Lake had no immediate comment.

What I’m Reading

• The judges in Burford Capital’s massive case against Argentina signaled openness to overturning a $16 billion court judgment as they heard appeal arguments. Burford’s shares fell as much as 15% during the hearing.
• My colleague Angélica Serrano-Román wrote about a Johnson & Johnson subsidiary that urged a Virginia federal court to force three medical experts to disclose who’s funding their defense in a trade libel lawsuit.
• The bankruptcy trustees for law firm Girardi Keese and Joseph DiNardo are trying to claw back nearly $3.2 million in transfers that they say were embezzled from a personal injury settlement. It’s half of the amount transferred to the firm’s litigation funders and the lawsuit says the transactions were “made with actual intent to hinder, delay, or defraud creditors.”

Leading the News

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Richest Firms Stockpile Litigators as Demand Surges

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Law Firms Join Early Winners in ‘Very Hot’ Texas Business Court

The nascent Texas Business Court is already paying off for law firms, who are using it to build caseloads, market services, and grow litigation departments.

Commentary & Opinion

Innovative Boutiques Offer Better Value Than Traditional Big Law

In an era of shrinking budgets and rising complexity, smart general counsel should rethink how they engage legal services. The solution is matching the right work to the right kind of firm.

Patent Office’s Inter Partes Review Restrictions Violate the Law

The US Patent and Trademark Office’s moves to limit inter partes review undermine law and make the director’s stated goal of issuing high-quality patents much harder.

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